Declining dirham deters Indian workers taking jobs in Dubai

05 March 2008
The fall in the value of the UAE dirham, which is pegged to the dollar, is the main factor deterring Indian construction workers from taking jobs in Dubai, according to a senior recruitment consultant.

Samir Khosla, managing director of US-based Dynamic Staffing Services, said the problem was more important than inflation in deterring workers coming to Dubai.

“Most of the workers coming here to work in construction don’t have any savings and just live from pay cheque from pay cheque,” said Khosla, speaking at MEED’s Dubai Mega Projects conference on 4 March. “Even a small fall in the value of the dirham against the rupee is a problem for them.”

Khosla said that five years ago, an Indian construction worker coming to Dubai would expect to earn four times as much as they would earn in India and save up to 250 per cent more.

“Based on a November 2007 case study, the currency change has reduced the pay differential to 40 per cent,” he said.

“There has been a change in hiring policies in the Indian construction industry, which means they are being appointed to company payrolls, which makes them entitled to sick pay.

"Indian employers are now providing them with Dubai-style accommodation and competitive holiday. As a result, it is becoming much harder for Middle East companies to hire. People are sending their families back because they can no longer afford to keep them in the country."

Khosla said that the issue is having a bigger impact on office staff and junior management.

“At the junior level, the difference between a Dubai and Indian salary has dropped to about 50 per cent. This differential narrows as you move up the hierarchical level. There is really no difference in pay for senior management working in Dubai or in India."

In the past, Indian workers wanting a job in the Gulf paid an agent to organise it. But, says Khosla, that system is disappearing as demand for Indian labour grows.

“With the emergence of options, the highly skilled workers are now able to make choices and they are going to make choices that align with their objectives, which include savings. When you have options you become a discerning customer.”

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